Consumer Banking and Payments Law: 2.7.2 Overdraft Loan Fees Described
This subsection covers fee-based overdraft programs under which the bank pays certain items, and charges an overdraft fee, despite the account having insufficient funds. Fee-based overdraft programs, sometimes euphemistically called “courtesy” overdraft services or “bounce protection,” extend short-term credit at triple-digit rates88 but exploit legal loopholes to avoid compliance with credit laws.89